Why Shares of E Commerce China DangDang Inc. Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of E Commerce China DangDang Inc. (NYSE: DANG  ) gained as much as 10% today and finished up 8% on a broad-based gain by Chinese online retailers.

So what: With excitement building for Alibaba's IPO, other Chinese e-commerce businesses have seen a lift as Vipshop Holdings  (NYSE: VIPS  ) finished up 7.3% today as well. The three companies have moved in tandem at times as strong Alibaba results are seen as good news for the industry of which it controls 80%. With investors still unable to grab a piece of the online giant, Vipshop and Dangdang may be the next best substitutes for now.

Now what: There was no major news on Alibaba today, though a Reuters report last night underscored the opportunity in Chinese e-commerce, noting a KPMG report that said by 2020 the Chinese online retail industry will be larger than that of the U.S., Japan, Germany, the U.K., and France combined. That opportunity is likely to draw investment in China's aging infrastructure, assisting smaller players like DangDang and Vipshop along the way. Notably, shares of Dangdang and Vipshop sank more than 10% over a two-day span last week when Alibaba announced its IPO at a price lower than many analyst expected. The two companies report earnings later this week, but I'd also expect the two stocks to continue to track with Alibaba's fortunes in the near future.

Will this stock be your next multibagger?
Give us five minutes and we'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with amazing potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303%! You don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

 


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2954272, ~/Articles/ArticleHandler.aspx, 12/18/2014 6:51:09 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement